Bankruptcy Chapter 7 vs 13 2027 Comparison

Compare Chapter 7 vs Chapter 13 bankruptcy 2027 — Ch 7 wipes debt (means test), Ch 13 restructures over 3-5 years. See income limits + asset protection.

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Chapter 7 (Liquidation)

Fast (4-6 months). Wipes most unsecured debt: credit cards, medical, personal loans. Cannot wipe: child support, recent taxes, student loans (almost never).

Chapter 13 (Reorganization)

3-5 year repayment plan. Catch up on mortgage/car. Save assets that Ch 7 might lose. Pay back 30-100% of unsecured debt (rest discharged). Trustee oversees.

Means Test

Above median income? Must pass detailed expense calculation to qualify for Ch 7. Otherwise forced to Ch 13. Most middle-income filers can structure to qualify.

Asset Protection

Federal exemptions: $25k home equity, $4k car, $14k household goods. State exemptions sometimes higher (FL homestead unlimited).

Source: uscourts.gov bankruptcy guides, abi.org consumer bankruptcy. Last updated: May 2026.